Energy Supply, Delivery, and Demand

Nationwide Impacts on Energy

The Nation’s energy system is already affected by extreme weather events, and due to climate change, it is projected to be increasingly threatened by more frequent and longer-lasting power outages affecting critical energy infrastructure and creating fuel availability and demand imbalances. The reliability, security, and resilience of the energy system underpin virtually every sector of the U.S. economy. Cascading impacts on other critical sectors could affect economic and national security.

The principal contributor to power outages, and their associated costs, in the United States is extreme weather.2,8,46 Extreme weather includes high winds, thunderstorms, hurricanes, heat waves, intense cold periods, intense snow events and ice storms, and extreme rainfall. Such events can interrupt energy generation, damage energy resources and infrastructure, and interfere with fuel production and distribution systems, causing fuel and electricity shortages or price spikes (Figure 4.1). Many extreme weather impacts are expected to continue growing in frequency and severity over the coming century,8 affecting all elements of the Nation’s complex energy supply system and reinforcing the energy supply-and-use findings of prior National Climate Assessments.9

Extreme weather can damage energy assets—a broad suite of equipment used in the production, generation, transmission, and distribution of energy—and cause widespread energy disruption that can take weeks to fully resolve, at sizeable economic costs.2,3 High winds threaten damage to electricity transmission and distribution lines (Box 4.1), buildings, cooling towers, port facilities, and other onshore and offshore structures associated with energy infrastructure and operations.3 Extreme rainfall (including extreme precipitation events, hurricanes, and atmospheric river events) can lead to flash floods that undermine the foundations of power line and pipeline crossings and inundate common riverbank energy facilities such as power plants, substations, transformers, and refineries.3 River flooding can also shut down or damage fuel transport infrastructure such as railroads, fuel barge ports, pipelines, and storage facilities.3

Figure 4.1: Potential Impacts from Extreme Weather and Climate Change

Figure 4.1: Extreme weather and climate change can potentially impact all components of the Nation’s energy system, from fuel (petroleum, coal, and natural gas) production and distribution to electricity generation, transmission, and demand. Source: adapted from DOE 2013.23

Coastal flooding threatens much of the Nation’s energy infrastructure, especially in regions with highly developed coastlines.4,5,6 Coastal flooding, including wave action and storm surge (where seawater moves inland, often at levels above typical high tides due to strong winds), can affect gas and electric asset performance, cause asset damage and failure, and disrupt energy generation, transmission, and delivery. In addition, flooding can cause large petroleum storage tanks to float, destroying the tanks and potentially creating hazardous spills.3 Any significant increase in hurricane intensities would greatly exacerbate exposure to storm surge and wind damage.

In the Southeast (Atlantic and Gulf Coasts), power plants and oil refineries are especially vulnerable to flooding. The number of electricity generation facilities in the Southeast potentially exposed to hurricane storm surge is estimated at 69 and 291 for Category 1 and Category 5 storms, respectively.4 Nationally, a sea level rise of 3.3 feet (1 m; at the high end of the very likely range under a lower scenario [RCP4.5] for 2100; for more on RCPs, see the Scenario Products section in App. 3)47 could expose dozens of power plants that are currently out of reach to the risks of a 100-year flood (a flood having a 1% chance of occurring in a given year). This would put an additional cumulative total of 25 gigawatts (GW) of operating or proposed power capacities at risk.48 In Florida and Delaware, sea level rise of 3.3 feet (1 m) would double the number of vulnerable plants (putting an additional 11 GW and 0.8 GW at risk in the two states, respectively); in Texas, vulnerable capacity would more than triple (with an additional 2.8 GW at risk).48 Sea level rise and storm surge already pose a risk to coastal substations; this risk is projected to increase as sea levels continue to rise. For example, in southeastern Florida the number of major substations exposed to flooding from a Category 3 storm could more than double by 2050 and triple by 2070 under the higher scenario (RCP8.5).49 Under RCP8.5, the projected number of electricity substations in the Gulf of Mexico exposed to storm surge from Category 1 hurricanes could increase by over 30% and nearly 60% by 2030 and 2050, respectively.1 Increases in baseline sea levels expose many more Gulf Coast refineries to flooding risk during extreme weather events. For example, given a Category 1 hurricane, a sea level rise of less than 1.6 feet (0.5 m)47 doubles the number of refineries in Texas and Louisiana vulnerable to flooding by 2100 under the lower scenario (RCP4.5).4

Box 4.1: Economic Impacts to Electricity Systems

Repairs to electricity generation, transmission, and distribution systems from recent hurricane events are costing billions of dollars. Con Edison and Public Service Electric and Gas invested over $2 billion (in 2014 dollars) in response to Superstorm Sandy.50,51 An estimate to build back Puerto Rico’s electricity systems in response to Hurricanes Irma and Maria is approximately $17 billion (in 2017 dollars).52

Rising air and water temperatures and extreme heat events53,54,55 drive increases in demand for cooling while simultaneously resulting in reduced capacity and increased disruption of power plants and the electric grid, and potentially increasing electricity prices to consumers. Increased demand for cooling will likely also increase energy-related emissions of criteria air pollutants (for example, nitrogen oxide and sulfur dioxide), presenting an additional challenge to meet national ambient air quality standards, which are particularly important in the summer, when warmer temperatures and more direct sunlight can exacerbate the formation of photochemical smog (see Ch. 13: Air Quality, KM 1 and 4). Unless other mitigation strategies are implemented, more frequent, severe, and longer-lasting extreme heat events are expected to make blackouts and power disruptions more common, increase the potential for electricity infrastructure to malfunction, and result in increased risks to public health and safety.2,3,8,15,56

If greenhouse gas emissions continue unabated (as with the higher scenario [RCP8.5]), rising temperatures are projected to drive up electricity costs and demand. Despite anticipated gains in end use and building and appliance efficiencies, higher temperatures are projected to drive up electricity costs not only by increasing demand but also by reducing the efficiency of power generation and delivery, and by requiring new generation capacity costing residential and commercial ratepayers by some estimates up to $30 billion per year by mid-century.3,57 By 2040, nationwide, residential and commercial electricity expenditures are projected to increase by 6%–18% under a higher scenario (RCP8.5), 4%–15% under a lower scenario (RCP4.5), and 4%–12% under an even lower scenario (RCP2.6).13 By the end of the century, an increase in average annual energy expenditures from increased energy demand under the higher scenario is estimated at $32–$87 billion (Figure 4.2; in 2011 dollars for GAO 201712 and in 2013 dollars for Rhodium Group LLC 2014, Larsen et al. 2017, Hsiang et al. 201716,13,14). Nationwide, electricity demand is projected to increase by 3%–9% by 2040 under the higher scenario and 2%–7% under the lower scenario.13 This projection includes the reduction in electricity used for space heating in states with warming winters, the associated decrease in heating degree days, and the increase in electricity demand associated with increases in cooling degree days.

Figure 4.2: Projected Changes in Energy Expenditures

Figure 4.2: This figure shows county-level median projected increases in energy expenditures for average 2080–2099 impacts under the higher scenario (RCP8.5). Impacts are changes relative to no additional change in climate. Color indicates the magnitude of increases in energy expenditures in median projection; outline color indicates level of agreement across model projections (thin white outline, inner 66% of projections disagree in sign; no outline, more than 83% of projections agree in sign; black outline, more than 95% agree in sign; thick gray outline, state borders). Data were unavailable for Alaska, Hawaiʻi and the U.S.-Affiliated Pacific Islands, and the U.S. Caribbean regions. Source: Hsiang et al. 2017.14

In a lower scenario (RCP4.5), temperatures remain on an upward trajectory that could increase net electricity demand by 1.7%–2.0%.15 To ensure grid reliability, enough generation and storage capacity must be available to meet the highest peak load demand. Rising temperatures could necessitate the construction of up to 25% more power plant capacity by 2040, compared to a scenario without a warming climate.13

Most U.S. power plants, regardless of fuel source (for example, coal, natural gas, nuclear, concentrated solar, and geothermal), rely on a steady supply of water for cooling, and operations are projected to be threatened when water availability decreases or water temperatures increase (see Ch. 3: Water and Ch. 17: Complex Systems, Box 17.3).3 Elevated water temperatures reduce power plant efficiency; in some cases, a plant could have to shut down to comply with discharge temperature regulations designed to avoid damaging aquatic ecosystems.3 In North America, the output potential of power plants cooled by river water could fall by 7.3% and 13.1% by 2050 under the RCP2.6 and RCP8.5 scenarios, respectively.21 A changing climate also threatens hydropower production, especially in western snow-dominated watersheds, where declining mountain snowpack affects river levels (see Ch. 24: Northwest, KM 3 and Ch. 25: Southwest, KM 5). For example, severe, extended drought caused California’s hydropower output to decline 59% in 2015 compared to the average annual production over the two prior decades.22

Reduced water availability also affects the production and refining of petroleum, natural gas, and biofuels. During droughts, hydraulic fracturing and fuel refining operations will likely need alternative water supplies (such as brackish groundwater) or to shut down temporarily.3,23,24 Shutdowns and the adoption of emergency measures and backup systems can increase refinery costs, raising product prices for the consumer.23 Drought can reduce the cultivation of biofuel feedstocks (see Ch. 10: Ag & Rural) and increase the risk of wildfires that threaten transmission lines and other energy infrastructure.3,8